Investigation into the alleged dumping of welded link

Report No. 249

Investigation into the alleged dumping of welded link steel chain originating in or imported from

the People’s Republic of China: Preliminary determination

The International Trade Administration Commission of South Africa herewithpresents its Report No 249: INVESTIGATION INTO THE ALLEGED DUMPING OFWELDED LINK STEEL CHAIN ORIGINATING IN OR IMPORTED FROM THEPEOPLE'S REPUBLIC OF CHINA: PRELIMINARY DETERMINATION

Itumel~"ACTING CHIEF COMMISSIONER

P~ETO~IAII 9 2007

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11. APPLICATION AND PROCEDURE

1.1 This investigation is conducted in accordance with the International TradeAdministration Commission Act, 2002, (the ITA Act), the World TradeOrganisation Agreement on Implementation of Articie VI of the GeneralAgreement on Tariffs and Trade, 1994 (the Anti-Dumping Agreement) andthe International Trade Administration Commission of South Africa Anti-Dumping Regulations (ADR).

1.2 The application was lodged by International Trade Services (ITS), on behalfof Scaw Metals Chain Products (the Applicant), being the only manufacturerof the subject product in the SACU.

1.3 The application was accepted by the Commission as being properlydocumented in accordance with Article 5.2 of the Anti-Dumping agreementon 05 December 2007. The trade representative of the country concernedwas advised accordingly.

1A The Commission formally initiated an investigation into the alleged dumpingof welded link steel chain originating in or imported from the PRC pursuant toNotice No. 35 which was published in Government Gazette No. 29547 on 26January 2007.

1.5 The investigation period for dumping is from 1 July 2005 to 30 June 2006.The injury investigation involved evaluation of data for the period 1 January2003 to 30 June 2006.

1.6 The SACU industry consists of only one producer of the subject product,namely Scaw Metals Chain Products, who submitted the informationcontained in this submission.

1.7 The following importer responded in full to the Commission's importersquestionnaire and its information was verified:

• Land G Tools and Machinery Distributors.

1.8 The following foreign manufacturers responded in full to the Commission'sexporters questionnaire and their information was verified:

• Sichuan Longchan Hongfa Chain Produce co Ltd• Rudong Chain Works

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1.9 After considering all parties' information, the Commission made a preliminarydetermination that the subject product (excluding those imported fromSichuan Longchan Hongfa Chain Produce co Ltd) was being dumped on theSACU market and the SACU industry is suffering material injury as a result.

1.10 As the Commission considered that the SACU industry would continue tosuffer material injury during the course of the investigation if provisionalpayments were not imposed, it decided to request the Commissioner forSouth African Revenue Service to impose provisional payments for a periodof twenty-six weeks.

1.11 The Commission therefore indicated that it was considering making a finaldetermination to recommend to the Minister of Trade and Industry thatdefinitive anti-dumping duties be imposed on the subject product, afterconsidering comments to this preliminary report.

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12. PRODUCTS, TARIFF CLASSIFICATION AND DUTIES

2.1 IMPORTED PRODUCTS

2.1.1 Description

The subject product is described as:

Non-articulated welded link chain, the links of which are manufactured fromround section iron or steel wire, bars or rods of a diameter of 4mm or more butnot exceeding 10mm, classifiable under tariff subheading, 7315.82.

2.1.2 Country of origin/export

The subject product is exported from the PRC.

2.1.3 Possible tariff loopholes

The Applicant indicated that it IS not aware of any loopholes In the tariffsubheading.

2.1.4 Other applicable duties and rebates

The following rebate provisions exist in terms whereof the subject product can beimported with rebate of the duty:

Table 2.1.4: Rebate and drawback items

Rebatel TariffDrawback headingItem316.13

316.13

Description Extent ofrebate

MACHINERY AND MECHANICALAPPLIANCES; ELECTRICAL EQUIPMENTPARTS THEREOF

Internal Combustion Piston Engines(Excluding Motor Cycle Engines) and PartsThereof

316.13

515.00

515.01

73.15

73.15

Full dutyTiming chains, of iron or steel

BASE METALS AND ARTICLES OF BASEMETAL PLUMBERS' BRASSWARE ANDSANITARY WARE

Full dutyChain, of iron or steel, used in themanufacture of sanitary fittings

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2.1.5 Negligibility test

The following table shows the alleged dumped imports as a percentage of thetotal imports:

Table 2.1.5: Import volumes

Negligibility test Import volumes 1 July 2005 to Volume as a percentage of total30 June 2006 (POI) - Tons import volume (2006)

Alleged dumpedimports:PRC 1 232 71.6%Total imports 1 720

If the non-dumped imports from the PRC are excluded from the PRC imports,the PRC imports as a percentage of total imports are still more than 50 percent.

The Commission found that the imports from the PRC are above the negligibilitylevel.

2.2 SACU PRODUCT

2.2.1 Description

The SACU product is described as:

Non-articulated welded link chain, the links of which are manufactured fromround section iron or steel wire, bars or rods of a diameter of 4mm or more butnot exceeding 10mm, classifiable under tariff subheading, 7315.82.

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2.3 LIKE PRODUCTS ANALYSIS

In determining the likeness of products, the Commission uses the followingcriteria:

Table 2.4: Like product determination

Criteria Imported product SACU product

Low carbon, low nickel, chrome Low carbon, low nickel, chrome

Raw materials and molybdenum content and molybdenum contentmanganese steel in round manganese steel in roundsections. sections.

Both the imported product and Both the imported product and the

Physical appearancethe SACU product have the same SACU product have the samephysical appearance and physical appearance andcharacteristics. characteristics.

Tariff classification 7315.82 7315.82

Production process Pickling, cutting, bending, Pickling, cutting, bending,pressing, welding and packaging. pressing, welding and packaging.

Retail/hardware, household, Retail/hardware, household,Application or end use transport, marine and industrial transport, marine and industrial

applications. applications.

The imported product and the The imported product and theSubstitutability SACU product are direct SACU product are direct

substitutes. substitutes.

The Commission considered comments that certain types of chain should beexcluded from the investigation, but found that SARS will not be able to excludethese chains from the anti-dumping duty, if any.

After considering all the above factors and the comments received, theCommission was satisfied that the SACU product and the imported product were"like products" for purposes of comparison in this investigation, in terms ofArticle 2.6 of the Anti-Dumping Agreement.

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13. INDUSTRY STANDING

The Applicant is the only manufacturer of the subject product in SACU. Theapplication is therefore supported by 100 per cent of the SACU industry.

The Commission decided that the application could be regarded as beingmade "by or on behalf of the domestic industry" under the provisions of theAnti-dumping Agreement.

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4.1

4.1.1

DUMPING

METHODOLOGY IN THIS INVESTIGATION FOR SICHUAN LONGCHANHONGFA CHAIN PRODUCE CO LTD IN THE PRC

Normal Value

Type of economy

Sichuan Longchan Hongfa Chain Produce Co, Ltd (Sichuan) responded infull to the Commission's exporter questionnaire and indicated that it is sellingits product in the ordinary course of trade in the PRC.

The Commission noted that Mr Shou Bin is the only shareholder of thecompany. Information was submitted that Sichuan bought its raw materials atcompetitive prices and that it sold its products to customers based on ordersplaced at competitive prices.

The Commission found that the labour is not unionized and that theproduction facilities are relatively small. Although no audited financials couldbe provided, as this is not a requirement for these small businesses, thecompany complied with general accepted accounting principles.

Based on the information submitted by Sichuan, the Commission decidedthat Sichuan sells its product in the ordinary course of trade in the PRC andthat the normal value be based on its actual domestic sales in the PRC andthat the definition of section 32 (2)(b)(i) of the ITA Act applies.

Calculation of normal value

The Commission found that Sinchuan sells the subject product on thedomestic market in the PRC. The actual invoiced sales were used tocalculate the normal value.

Adjustments to the normal value

The following adjustment to the normal value was claimed by the Exporterand allowed by the Commission as it was shown that there was a differencein costs, which was demonstrated to have affected price comparability at thetime of setting the prices.

(i) Inland freight

An adjustment for the domestic freight charges to deliver the product to thecustomers was made to the normal value.

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4.1.2 Export price

Calculation of export price

Sinchuan, the manufacturer of the product, sells the product to ChongqingMinmetal and Machinery Import Export Company Limited (Minmetal) whichexport the product to SACU.

Both these companies responded to the Commission's questionnaire.Minmetal is only a trader and does not manufacture the subject product. Inline with the Commission's policy it was indicated to Minmetal that theCommission does not grant individual treatment to traders but only tomanufacturers. Minmetal's information was only used to calculate the exportprice.

The Commission decided to calculate the ex-factory export price based onthe sales from Sinchuan to Minmetal.

Adjustments to the export price

The Commission made the following adjustments to the export price, asverified by the investigators, for purposes of calculating the ex-factory exportprice:

(i) Inland freight

An adjustment for the inland freight charges from the factory to the river,where the product is shipped to Shanghai for export, was made to the exportprice.

4.1.3 Margin of dumping

Dumping margin as a percentage of the export price was calculated to be(17.6%).

4.2 METHODOLOGY IN THIS INVESTIGATION FOR RUDONG CHAINWORKS IN THE PRC

4.2.1 Normal Value

Type of economy

The Applicant, in its application, indicated that it believes that the subjectproduct is not sold in the ordinary course of trade in the PRC and that thenormal value calculations should be done with the definition of Section 32(4)of the ITA Act as basis.

Rudong Chain Works Co, Ltd (Rudong) responded in full to theCommission's exporter questionnaire and indicated that it is selling its

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product in the ordinary course of trade in the PRC.

The Commission found that Rudong is a multi-shareholder company with anumber of directors. The Commission found that raw materials were boughtfrom more than one supplier at competitive prices. Sales were made atcompetitive prices on orders received from customers. Labour is unionizedand a formal process is in place for hiring and dismissing of employees. Theproduction facilities are advanced and most of the machines are imported.Audited financial statements were submitted.

Based on the information submitted, the Commission decided that Rudongsold its product in the ordinary course of trade in the PRC and that thenormal value be based on its actual domestic sales in the PRC and that thedefinition of section 32 (2)(b)(i) of the ITA Act applies.


Rudong sells the subject product on the domestic market in the PRC. Theactual invoiced sales were used to calculate the normal value.

The normal values for the grades of chain exported to SACU during the POIwere calculated.

Where it was found that more than 20% of sales were made at a loss, ifcalculated per grade, these sales were excluded from the normal valuecalculations. A cost build-up was done for one grade where the domesticsales made at a loss were excluded, the domestic sales volume was lessthan 5% of the export sales volumes.


The following adjustment to the normal value was claimed by the exporterand allowed by the Commission as it was shown that there was a differencein costs, which was demonstrated to have affected price comparability at thetime of setting the prices:

(i) Inland freight

An adjustment for the domestic freight charges to deliver the product to thecustomers was made to the normal value.

4.2.2 Export price


A record of all export sales to SACU during the POI was provided on atransaction by transaction basis.

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Adjustments to the export price

The Commission made the following adjustments to the export price, asverified by the investigators, for purposes of calculating the ex-factory exportpnce:

(i) Inland freight

An adjustment for the inland freight charges from the factory to the ship wasmade.

(ii) Ocean freight

An adjustment for the ocean freight charges from the PRC to SACU wasmade. The adjustment was made on each transaction where the cost wasincluded in the selling price.

(iii) Insurance

An adjustment for the insurance cost was made to the CIF sales made toSACU. The adjustment was made on each transaction where the cost wasincluded in the selling price.

(iv) Port charges

An adjustment for port charges on the exports to SACU was made whereapplicable in order to calculate the ex-factory export price.

(v) Cost of payment terms

It was found that one of the customers in SACU received payment terms. Anadjustment was made to these sales based on the amount of days on theamount of days and the applicable interest rate.


The weighted average margin of dumping was calculated to be 2.43%.

4.3 METHODOLOGY IN THIS INVESTIGATION FOR ALL THE NON-COOPERATING EXPORTERS IN THE PRC

4.3.1 Normal Value

Type of economy

The Applicant indicated that it believes that the subject product is not sold inthe ordinary course of trade in the PRC. Therefore, the calculations are donewith the definition of Section 32(4) of the ITA Act as basis.

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The Applicant nominated Australia as a third country for the PRC forpurposes of calculating the normal value in this investigation.

The Applicant indicated that it believes that the chain manufacturing industryin the PRC and that of Australia is on the same level of development. TheApplicant further stated that the manufacturing of chain involves similarprocesses, which increases the homogeneity of the product concerned.

The Commission considered all the comments submitted by interestedparties on the use of Australia as a suitable third country. The Commission,however, decided to use the actual, verified sales information submitted byPWB Anchor in Australia to calculate the normal value.

The information submitted by PWB Anchor was verified.

The actual domestic sales on the Australian market of the subject productswere submitted and this information was used to calculate the normal value.The sales values net of GST were used to calculate the normal value.


The following adjustments to the normal value were made by theCommission to calculate the ex-factory normal value:

(i) Inland freight

An adjustment to the domestic freight charges to deliver the product to thecustomers was made.

(ii) Payment terms

An adjustment for payment terms given to certain customers was made tothese sales.

4.3.2 Export price


The export price to SACU was based on the official import statistics asobtained from SARS for the period 1 July 2005 to 30 June 2006.


The dumping margin expressed as a percentage of the FOB export price wascalculated to be 52.9%

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4.4 SUMMARY - DUMPING

For purposes of its preliminary determination, the Commission considered allthe comments from interested parties and found that the subject productoriginating in PRC was being dumped into the SACU market with thefollowing margins:

Table 4.4: Margin of dumping

Country of originPRCSichuan Longchan HongfaChain Produce Co LtdRudon Chain Works.All other manufacturers

Dumping margin expressed as a percentage ofex-facto export rice

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15. MATERIAL INJURY

5.1 DOMESTIC INDUSTRY - MAJOR PROPORTION OF PRODUCTION

The following injury analysis relates to Scaw Metals Group Chain Products,the Applicant, which constitutes 100 per cent of the total domestic productionof the subject product.

The Commission made a preliminary determination that this constitutes "amajor proportion" of the total domestic production, in accordance with Article4.1 of the Anti-Dumping Agreement.

5.2 EXTRAPOLATION OF THE 2006 FIGURES

The Applicant submitted information on material injury for the period 1January 2003 to 30 June 2006. The Applicant indicated that its chainproducts division changed to a new IT system (SAP) and no historyinformation was loaded. It indicated that it was basically impossible to extracthalf-year information for the years prior to 2006 from its archives then. Inorder to determine the trends on annual data for the purposes of the meritsubmission, the information for January to June 2006 was extrapolated for afull year in order to compare this information to the other years' information.

The Commission compared the acted 2006 financial information to theextrapolated 2006 figures and found that the trends were substantially thesame.

The Commission, therefore, decided to deviate from its practise to comparethe January to June 2006 figures with the corresponding 6 months'information for the period 2003 - 2005 and accept the extrapolated figures toevaluate the trends.

Therefore, the material injury information in this report for 2006 relates to theJanuary to June 2006 figures, which was extrapolated for a full year.

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5.3 IMPORT VOLUMES AND EFFECT ON PRICES

Basic Data Set

Year Unit Subject Other Applicant's Inventories Applicant'sImports imports Production sales volumes

2003 tons 749 573 100 100 100

2004 tons 887 619 83 104 94

2005 tons 1 032 504 76 69 98

2006 tons 1 243 373 79 111 79The Applicant's information in the table was indexed due to confidentially using 2003 as the base year.

In any dumping investigation, the Commission normally uses audited importstatistic from SARS to determine the volume of the subject product enteringthe SACU from the countries under investigation. It considers these statisticsto be the most reliable. The alleged dumped imports as a percentage of totalimports increased significantly over the investigation period, to 76.9% in2006.

The Applicant's production and sales decrease over the period ofinvestigation (POI), which the Applicant alleged is as a result of the increasein dumped imports.

The Commission noted both the importers and the Applicant's comments onthe stock availability from the Applicant.

Examination under Article 3.2

Growth of Subject Imports

Unit of Year ChanaeVariable

Measurement 2003 2004 2005 2006 2003/2006Subjectsimports/ % 100 142 181 210 110domesticproductionSubjectsimports/ % 100 105 120 145 45domesticconsumption

The information in this table was indexed due to confidentiality using 2003 as the base year.

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Price Effects of Subject Imports

Variable Unit of Year ChanaeMeasurement 2003 2004 2005 2006 2003/2006

Average import price (fob) Rands 100 114 114 108 8Average price of domesticproduct (ex-factory) (price Rands 100 104 111 108 8depression)Price undercutting % 100 75 93 98 6Cost as % of selling price % 100 112 111 114 14(suppression)The information in this table was indexed due to confidentiality using 2003 as the base year.

The information in the tables above indicates that the alleged dumped importsas a percentage of domestic production and of domestic consumptionincreased. The price undercutting decreased over the period, but still remainsat a high level.

The Applicant did not experience price depression, but its prices did notincrease in line with its increases in costs and the Applicant, therefore,experienced price suppression.

The Commission considered the comments received from interested partieson the pricing of the Applicant.

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5.4 CONSEQUENT IMPACT OF THE DUMPED IMPORTS ON THEINDUSTRY

Examination under Article 3.4

Unit of Year ChangeVariable Measurement

2003 2004 2005 2006 2004/2006

Sales: tons 100 94 97 79 (21)Inventories tons 100 104 69 111 11(quantities)

Output tons 100 83 76 79 (21)(quantities)

Market share% 100 88 88 73 (27)of Applicant

Market share ofalleged dumped % 100 110 126 154 54importsMarket share of % 100 101 80 60 (40)other imports

Capacity utilization % 100 83 76 79 (21)

Employment units 100 100 97 101 1Wages (totalwage bill, Rands 100 108 116 128 28monthly averageProductivity Unit / 100 85 78 78 (22)(output/worker) employee


The information in the table indicates that the Applicant had a decrease in itssales volumes, output, market share, productivity and capacity utilization.

The Applicant's employment remained constant, while the wages increased.

The market share of the alleged dumped imports increased, while themarket share of other imports decreased.

The Commission considered comments submitted by interested parties onthe availability of product from the Applicant and the Applicant's response.All the comments are available on the public file.

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Year ChangeUnit of

VariableMeasurement

2003 2004 2005 2006*2003/2006

Profit (Rands/unit) 100 69 74 66 (34)

Cash flow Rands 100 62 67 54 (46)Return on % 100 83 75 57 (43)investmentAbility to raisecapital (capital Rands 100 50 155 70 (30)expenditure)Growth in SACU % 100 147 (125) (225)market

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Growth of % (100) 49 (312) (412)Applicant -

Factors affectingdomesticprices (cost of Rand/ton 100 116 123 122 22raw material perunit)Magnitude of themargin of Rudong Chain Works 2.43%dumpinq All other manufacturers 52.9%


The information in the table indicates that the Applicant's profit and return oninvestment declined. There was a negative effect on the cash flow and theability to raise capital.

The Commission considered all comments received. The comments areavailable on the public file.

5.5 CONCLUSION - MATERIAL INJURY

After considering all relevant factors and taking all comments into account,the Commission made a final determination that the Applicant was sufferingmaterial injury in that:

the alleged dumped imports had increased significantly;there was price undercutting;it experienced price suppression;its sales declinedits output declined;its profits decreased;its market share declined;its utilisation of production capacity declined;its productivity declined;there was a negative effect on its cash flow;

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its return on investment declined;its employment declined; andthere was a negative effect on its growth.

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16. CAUSAL LINK

6.1 GENERAL

In order for the Commission to make a preliminary determination, it must besatisfied that there is sufficient evidence to indicate that the material injuryexperienced by the SACU industry is as a result of the dumping of the subjectproducts.

6.2 VOLUME OF IMPORTS AND MARKET SHARE

An indication of causality is the extent of the increase of volume and the extentto which the market share of the domestic industry has decreased since thecommencement of injury, with a corresponding increase in the market share ofthe alleged dumped product.

The following table compares the market share of the SACU industry with that ofthe alleged dumped imports:

Table 6.2.1: Market share

Percentage market share held by: 2003 2004 2005 2006

Applicant 100 88 88 73

Alleged dumped imports 100 110 126 154

Other imports 100 101 80 60


The information in the table indicates that the market share of the Applicantdecreased over the POI, with a corresponding increase in the market share ofthe alleged dumped imports.

The following table shows the volume of imports:

Table 6.2.2: Import volumes

Import volumes 2003 2004 2005 2006(Tons)Alleged dumped imports 749 887 1 032 1 243Other imports 573 619 504 373Total imports 1 322 1 506 1 536 1 616Alleged dumped imports 56.7% 58.9% 67.2% 76.9%as a % of total imports

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The alleged dumped imports increased significantly over the POI. The allegeddumped imports as a percentage of the total imports of the subject product alsoincreased over the POI.

6.3 EFFECT OF DUMPED IMPORTS ON PRICES

The following table shows the price effects of the Applicant:

Table 6.3.1: Price undercutting, price depression and price suppression

Price undercutting, depressionand 2003 2004 2005 2006suppressionApplicant's ex-factory averageprice 100 104 111 108Cost as a % of selling price 100 112 111 114Price undercutting % 100 75 93 98


The information in the table above indicates that the price of the importedproduct is undercutting the Applicant's price. The Applicant's selling priceincreased slightly over the POI, but not in relation to the increase in the cost ofthe product.

6.4 CONSEQUENT IMPACT OF DUMPED IMPORTS

Material injury indicator Analysis(2003- 2006)

Sales volume DecreaseProfit DecreaseOutput DecreaseMarket share DecreaseProductivity DecreaseReturn on investment DecreaseUtilisation of capacity DecreaseCash flow DecreaseInventories IncreaseEmployment DecreaseWaqes IncreaseGrowth DecreaseAbility to raise capital Decrease

From the information in the table it is clear that the Applicant did not decreasedits selling prices, but that its volumes decreased over the POI. All the otherfactors show that there was a negative effect.

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6.5 FACTORS OTHER THAN THE DUMPING CAUSING INJURY

6.5.1 Examination of causality under Article 3.5

Year Change (%)Variable 2003 2004 2005 2006 2003/2006Prices of imports not sold atdumping prices (fob price) 26 107 25 350 32 101 31 241 19.7(R/ton)Volume of imports not sold 573 619 504 373 (34.9)at dumpinq (Tons)Growth rate for subject 100 107 110 108 8product industryChanges in the patterns of

The Applicant indicated that there is none.consumptions

Trade-restrictive practices offoreign and The Applicant indicated that there is none.domestic producersCompetition between foreign The Applicant is the only SACU manufacturer; therefore thereand domestic producers is no competition between domestic producers.Developments in technology The Applicant indicated that there was none.Export performance of the The Applicant stated that its export performance could notdomestic industry detract from the causal link, as it did not export the subject

product during the POI.Productivity of the domestic The Applicant stated that its productivity is on par with otherindustry foreign manufacturers. Bantam indicated that the Applicant

indicated under material injury that its productivity decrease,but that this is not the case with the PRC.

The growth rate information in this table was indexed due to confidentiality using 2003 as the base year.

The Commission considered comments submitted by interested parties on theunavailability of stock from the Applicant and the pricing of the Applicant. All thecomments are available in the public file.

6.6 SUMMARY ON CAUSAL LINK

After considering all relevant factors and comments, the Commission found thatthere was a causal link between the dumped products and the material injurysuffered by the Applicant. In coming to this conclusion the Commissionconsidered relevant factors other than dumping that could be causing materialinjury and decided that these did not detract from the causal link.

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17. SUMMARY OF FINDINGS

7.1 Dumping

Based on the information as verified, the Commission found that the subjectproduct originating in or imported from the PRC was imported at dumped pricesinto the SACU market by Rudong Chain Works and non-cooperating exporters.

The following dumping margin was calculated:

Country of origin Dumping margin expressed as a percentage ofPRC ex-facto ex ort priceSichuan Longchan Hongfa ChainProduce Co LtdRudon Chain Works.All other manufacturers

7.2 Materiallnjury

The Commission found that the Applicant suffered material injury in the form ofprice undercutting, price suppression, the decline in output, sales, profit, marketshare, productivity, capacity utilization, negative effect on cash flow, return oninvestment and growth.

7.3 Casual link

After considering all relevant factors and comments, the Commission found thatthere was a causal link between the dumped products and the material injurysuffered by the Applicant. In coming to this conclusion the Commissionconsidered relevant factors other than dumpinq that could be causinq materialinjury and decided that these did not detract from the causal link.

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Is. PROVISIONAL MEASURES

8.1 Calculation of provisional measures

The Commission found that all requirements for the imposition of aprovisional payment have been fulfilled.

In accordance with Article 9.1 of the Anti-Dumping Agreement, theprovisional payments should be less than the dumping margin if such lesserduty would be adequate to remove the injury to the domestic industry. Theprovisional payment should therefore not be more than the amount of theprice disadvantage experienced by the SACU industry. If this is lower thanthe dumping margin it can be considered to be the amount of duty required toprevent further injury to the SACU industry during the investigation as a resultof the further importation of the subject product at the dumping margins thatwere found by the Commission.

8.2 Price disadvantage

The price disadvantage is the extent to which the price of the importedproduct (landed cost) is lower than the unsuppressed and undepressed ex-factory selling price of the SACU product.

The Applicant's unsuppressed selling price was calculated based on the costof production for 2006 and adding the same gross profit margin, as apercentage of cost of production, as that of 2003.

The landed cost and the FOB export price were based on the verifiedinformation from L&G Tool. The price disadvantage as a percentage of theFOB export price was calculated to be 76.5%.

8.3 Amount of provisional measure

The amount of duty was concluded to be the following, being the lesser of theprice disadvantage or the dumping margin:

Table 8.4: Amount of duty

Company Amount of provisional measure

Rudong Chain Works 2.4%

All other exporters from the PRC 52.9%(excluding Sichuan)

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19. PRELIMINARY DETERMINATION

The Commission made a preliminary determination that:

1. The subject product originating in or imported from the PRC (excludingthose imported from Sichuan Longchan Hongfa Chain Produce co Ltd)is being dumped into the SACU market;

2. The SACU industry is suffering material injury;

3. There is a causal link between the dumping of the subject product andthe material injury experienced by the SACU industry;

The Commission decided to request the Commissioner for South AfricanRevenue Service to impose the following provisional payments for a periodof 26 weeks:

Exporter Provisional measures

Rudong Chain Works. 2.43%All other exporters from the PRC (excludingthose imported from Sichuan LongchanHongfa Chain Produce co Ltd 52.9%

These provisional payments are the amount required to prevent furtherinjury being experienced by the SACU industry as a result of further importsof the subject product at dumped prices, which constitute dumping duringthe course of the investigation before the Commission makes its finaldetermination.

The Commission indicated that it was considering making a finaldetermination to recommend to the Minister of Trade and Industry thatdefinitive anti-dumping duties be imposed on the subject product, afterconsidering comments to this preliminary report.

Documents

Investigation into the alleged dumping of welded link